Gasoline price hits record high

by Clarence Leong | UPDATED March 08, 2022 04:12 AM EST

US drivers are now paying an average of $4.173 per gallon at the pump, says AAA

The US gasoline price hit a record high, tracking growth in global energy markets and showing how the war in Ukraine is having far-reaching economic consequences.

The rising cost of filling the tank adds fresh pressure to American households already tackling the sharpest inflation in decades, and could stifle economic growth by stifling spending on other items.

AAA said early Tuesday that the national average price of regular gasoline reached $4.173 per gallon, surpassing the previous record set in July 2008 of $4.114. Data from the Automobile Association shows that the price was 15% higher than a week ago and 21% higher than a month ago.

Energy markets were already tight as the global economy recovered from the pandemic, and gasoline prices have climbed recently as traders, shippers and financiers cut off oil supplies from Russia, which is the second largest oil market for crude after Saudi Arabia. is the world’s second largest exporter. to the International Energy Agency.

Benchmark US crude-oil futures have jumped 59% this year since Monday, when they closed at $119.40 a barrel, the highest level since September 2008. In Asian trading hours on Tuesday, the price rose 1.5% to $121.14 a barrel.

US fuel manufacturers also backtracked from refining oil into gasoline, diesel and other products during the economic downturn induced by the pandemic. The US market has lost nearly one million barrels of daily gasoline-refining capacity since the beginning of 2020, when it was producing about 19 million barrels of gasoline a day.

Gasoline prices vary greatly based on taxes and access to energy infrastructure, with average prices in some states such as California and Nevada much higher than in others such as Texas and Oklahoma, AAA data shows.

The comparison with 2008 has not been adjusted for changes in purchasing power. By one estimate, adjusting for inflation since then, the earlier record would now equate to a price of about $5.20 per gallon.